H.B. No. 5123 introduces new financial assurance requirements for operators regulated by the Railroad Commission of Texas, specifically concerning the operation and closure of produced water recycling pits and related facilities. The bill adds Section 91.115 to the Natural Resources Code, which allows the Commission to accept various financial assurance mechanisms, such as self-insurance and parental bonding, to demonstrate an operator's ability to meet financial security obligations. Additionally, operators with multiple subsidiaries can fulfill financial security requirements through a single consolidated bond, provided they demonstrate financial adequacy to the Commission.

The bill also mandates the development of a system for operators to submit annual reports detailing the facilities covered by specific bonding mechanisms and ensuring proper assignment of financial responsibility during asset transfers. The Railroad Commission is tasked with adopting necessary rules to implement these provisions, including criteria for financial adequacy, requirements for consolidated bonding structures, and procedures for tracking financial responsibility during ownership changes. Importantly, the Commission retains the authority to require additional financial security if it deems an operator's assurance insufficient to cover potential closure and remediation costs. The rules must be adopted by December 31, 2025, and the Act will take effect on September 1, 2025.

Statutes affected:
Introduced: ()